California Announces $267 Million Hospice Fraud Bust Amid Political Clash Over Health Care Oversight

California officials have announced a major crackdown on what they describe as a massive hospice fraud scheme that allegedly cost the state more than $267 million.

The investigation, known as “Operation Skip Trace,” has led to charges against more than 20 individuals, with five arrests so far. Authorities say the suspects were part of a complex network of shell companies that fraudulently billed the state’s Medi-Cal program for hospice services that were never provided.

According to California Attorney General Rob Bonta, the scheme involved using stolen personal information to enroll out-of-state residents—many of whom were healthy and unaware—into hospice care programs. The operation allegedly funneled money through a web of shell companies after submitting false claims.

Officials say the fraud not only stole taxpayer money but also diverted resources away from patients who genuinely needed end-of-life care.

The announcement comes amid growing political tension between California leaders and the federal government. Federal officials recently criticized the state’s handling of healthcare fraud, with one calling California the “kingdom of fraud.” State leaders pushed back, emphasizing that California has a long track record of investigating and prosecuting Medi-Cal fraud cases, recovering more than $1.5 billion over the past decade.

If convicted, those charged in the scheme could face up to 16 years in prison.

State officials say the case highlights both the scale of healthcare fraud and ongoing efforts to protect public funds and vulnerable patients.

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